All you need to know about raising private capital through a managed investment scheme.

In almost every case, if you raise money – from people you know or from strangers – you need an Australian Financial Services License (AFSL). The method by which you raise funds does not alter this requirement. Raising money in Australia is a heavily regulated activity. There are severe penalties – including imprisonment for up to five years – for people who do not comply with the rules, and that includes both the party raising the money and those who assist them.

What is a “fund”?

The terms “fund,” “syndicate,” “club investment” and various other terms all refer to the same concept defined under the Corporations Act 2001 as a “managed investment scheme.”

These schemes are typically structured as unit trusts.

“Fund” is the term commonly used in the financial services industry.

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